Not So Fast: Chicago Trib Still Hasn't Crossed Bankruptcy Finish Line

(Image credit: Getty Images via @daylife)U.S. Bankruptcy Court Judge Kevin J. Carey this week granted a stay of his confirmation order last month that would enable The Chicago Tribune to emerge from Chapter 11 bankruptcy (see "TUOL" post 7/16/12), but for the "time out" to continue, creditor Aurelius Capital Management ("ACM"), which is appealing the media conglomerate's reorganization plan, must post a $1.5 billion bond by August 29, the Tribune reports.

It's uncertain whether junior creditor ACM has the will or the way to rustle up the bond money to continue its appeal of the reorganization plan that gives senior creditors ownership of the Tribune Co. The conglomerate, which filed for bankruptcy in December 2008 (In re Tribune Co., Case No. 08-bk-13141), has  rung up more than $400 million in attorneys' fees wending its way through insolvency.

If the ACM appeal fizzles and the stay is lifted, the Tribune Co. must still garner FCC approval of its transfer of its television and radio properties, which include WGN-TV, to the new owners. According to the Tribune article, the conglomerate also must secure  $1.1 billion in debt financing and a credit line.

Tribune Co. Bankruptcy Ordeal Ends: Whither Chicago Trib & LA Times?

(Image credit: Getty Images via @daylife)It took three-and-a-half years and generated roughly $400 million in attorneys' fees, but Delaware U.S. Bankruptcy Judge Kevin J. Carey last Friday signed off on the restructuring agreement that will enable the Tribune Co. to emerge from Chapter 11 insolvency (In re Tribune Co., Case No. 08-bk-13141), according to an article in the Hollywood Reporter.

The Tribune Co., which last year unloaded the NL Central Division cellar-dwelling Chicago Cubs (see "TUOL" posts 11/1/11, 3/29/10), is expected to divest itself of ownership of its newspaper division, which includes The Chicago Tribune, Baltimore Sun and Los Angeles Times. The Chicago-based media conglomerate's holdings, valued at an estimated $7 billion, include 23 television stations, such as WPIX in New York City and WGN in Chicago, nine dailies and several magazines.

Billionaire entrepreneur Sam Zell used a $13 billion leveraged buyout to acquire the Tribune Co., which entered bankruptcy in 2008. Senior creditors are the new owners, among them, Oaktree Capital Mgt., Angelo, Gordon & Co., and JP Morgan Chase & Co. (which in recent weeks has shown us how easy it is to lose $5.8 billion). The new dream team will need the FCC's blessings to transfer ownership of the entity's radio and television licenses.